Oil Firms Suspend Shipments Through Strait of Hormuz Amid Middle East Tensions

Alanbatnews -

Several major oil and trading companies have suspended shipments of crude oil and fuel through the Strait of Hormuz, according to sources, amid ongoing tensions and military actions in the Middle East.

The decision to halt shipments follows recent events that have heightened concerns about the safety of navigation in the critical waterway.

"Our vessels will remain in place for several days," a senior executive at a trading firm told Reuters, highlighting the immediate impact of the escalating situation on shipping operations.

The Strait of Hormuz is a vital artery for global oil supplies, with approximately one-fifth of the world's total oil consumption passing through it.

Data from analytics firm Vortexa indicates that over 20 million barrels of crude oil, condensates, and fuel transit the strait daily on average.

Heightened military activity in the region could lead to increased demand for naval escorts, particularly from Western warships, to ensure safe passage for oil and gas tankers through the Strait of Hormuz.

While increased security measures might slow down shipping, they are not expected to significantly disrupt global energy supplies, according to analysts.

However, a complete closure of the strait, even for a few days, would present a worst-case scenario for energy markets.

Earlier, Kepler's senior oil analyst, Muyu Xu, projected that a one-day closure of the Strait of Hormuz by Iran could cause global oil prices to surge to between $120 and $150 per barrel.

Concurrently, international airlines have canceled flights to Middle Eastern destinations following the increased regional tensions. Several countries in the region temporarily closed their airspace in response to recent events.